Brent slips to near $109 as Sandy damps US oil demand
Brent crude slipped to near USD 109 a barrel on Tuesday as Sandy, one of the biggest storms ever to hit the United States, shut East Coast refineries, roads and airports, reducing crude and fuel demand in the world's largest oil consumer.
October 30, 2012 / 13:01 IST
Brent crude slipped to near USD 109 a barrel on Tuesday as Sandy, one of the biggest storms ever to hit the United States, shut East Coast refineries, roads and airports, reducing crude and fuel demand in the world's largest oil consumer.
Fuel supply into the region ground almost to a halt as the storm forced the closure of two-thirds of the region's refineries, its biggest pipeline, and most major ports.Also Read: US economy may skirt direct hit from Hurricane SandyBrent crude for December slipped for a second session, to stand down 40 cents at USD 109.04 a barrel by 0652 GMT. US crude for December edged down 17 cents to USD 85.37.US gasoline futures fell 0.73 percent to USD 2.7368 a gallon, after climbing more than 5 cents on Monday on expectations of tighter supply.Global markets were subdued on the closure of New York stock exchanges, with Asian shares making modest gains.Sandy battered the US East Coast, prompting the closure of air, ship, rail and even highway services, and knocked out power to more than 2.8 million homes and businesses in the region."People can't go out, they can't use, they can't consume," said Jonathan Barratt, chief executive of Barratt's Bulletin, a Sydney-based commodity research firm. "Crude inventories are running pretty high, 11-12 percent above a 5-year average.""The only area of concern is if the refineries are going to be knocked out for a period of time," Barratt said, but added this would be a rare event as operators were prepared for the storm.Sandy will close US stock markets for a second day on Tuesday, as Wall Street turned its attention to whether markets would be able to resume functioning for the month's final trading day on Wednesday.The American Petroleum Institute said on Monday it had not yet delayed the release of its weekly petroleum stocks report, but would continue to assess conditions.Analysts, in a preliminary poll by Reuters, expect US crude inventories to rise by 1.5 million barrels for the week ended October 26."We're not going to see much ease-up on imports into the US Gulf," said Carl Larry, president of Oil Outlooks and Opinions in the United States, adding that Saudi Aramco was busy getting ready to restart its Port Arthur refinery.Speculators have cut net long positions in Brent crude oil and gasoil futures and options after three weeks of increases, data from the IntercontinentalExchange (ICE) showed, as an impending restart at Britain's largest oilfield Buzzard cooled prices.But Buzzard's restart has again slipped by a few more days from Monday and this could delay shipments. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
